Manhattan U.S. Attorney Files And Simultaneously Settles Lawsuit Against St. Luke’s-Roosevelt Hospital Center For Fraudulently Billing Medicare And Medicaid

FOR IMMEDIATE RELEASE

Thursday, February 7, 2013

Hospital Admits Filing Duplicative Claims and Claims for Non-Reimbursable Costs and Agrees to Pay $2.325 Million

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed and simultaneously settled a health care fraud lawsuit under the False Claims Act against the ST. LUKE’S-ROOSEVELT HOSPITAL CENTER (the “Hospital”), CONTINUUM HEALTH PARTNERS, INC., and SLR PSYCHIATRIC ASSOCIATES (“SLR”) (collectively, “ST. LUKE’S”) for improperly billing Medicare and Medicaid for out-patient services provided at its mental health clinics. As part of the settlement, ST. LUKE’S agreed to pay $2,325,000 to settle the Government’s claims for damages and penalties under the False Claims Act, with $1,258,115.17 of that amount to be paid to the United States and the balance to the State of New York for its share of the Medicaid overpayment. The settlement was approved yesterday by United States Circuit Court Judge Denny Chin, sitting by designation.

Manhattan U.S. Attorney Preet Bharara stated: “As they admitted today, St. Luke’s engaged in billing shenanigans that siphoned millions of taxpayer dollars out of government health care programs intended to benefit elderly and low-income individuals. Medicare and Medicaid fraud divert precious and dwindling resources from those who truly need help, and this Office will keep protecting those resources.”

According to the Complaint and Settlement filed in this case:

ST. LUKE’S double-billed the United States for psychiatric services provided by the Hospitals’ physicians at SLR, one of its out-patient mental health clinics, in two ways: (1) the Hospital sought and received reimbursement pursuant to Medicare for non-reimbursable costs relating to outpatient psychiatric visits conducted by SLR during the period 1999 to 2002; and (2) the Hospital billed out-patient psychiatric services to Medicaid as a rate-based service, which included the care provided by the physician and all other related costs. At the same time, SLR billed the Government on a fee-for-service basis for the same care provided by the physician. As a result, ST. LUKE’S received Medicare and Medicaid payments that it was not entitled to receive.

As part of the settlement, ST. LUKE’S has admitted, acknowledged, and accepted responsibility for the following conduct:

During the period 1999 to 2002, the Hospital sought and received reimbursement pursuant to Medicare for non-reimbursable costs relating to outpatient psychiatric visits conducted by SLR.

During the period from on or about February 1998 through 2002, the Hospital and SLR overbilled the United States and New York State in connection with claims for reimbursement under Medicaid relating to outpatient psychiatric visits conducted by SLR; specifically, SLR submitted claims and received reimbursement under Medicaid for costs that were already included in, and reimbursed to the Hospital pursuant to, separate claims submitted by the Hospital.

From 2003 through 2010, the Hospital submitted claims and received reimbursement under Medicaid relating to services furnished by physicians in the Hospital’s outpatient mental health clinic. Department of Social Services regulations provide that “[t]he costs of routine physicians' services are included in facilities' rate or fee and shall not be billed separately.” The Hospital billed for such physician services separately, although the Hospital had removed the physician costs from its institutional cost report.

Pursuant to the settlement, ST. LUKE’S will pay $1,258,115.17 to the United States and $1,066,884.83 to the State of New York in damages and civil penalties within ten days of the settlement.

Mr. Bharara thanked the Office of the Inspector General for the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services for their assistance with the case. He also thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General.

This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Joseph A. Pantoja is in charge of the case.